Starting your own business can be both exciting and frightening, especially when you do not know where to get your capital. From government grants to private investors, Singapore offers a wide array of capital funding options. It is up to you to choose which one can benefit you the most. If you want to know more, then you can read these twelve start-up capital options.
12 Start-Up Capital Options:
Angel investors are wealthy and successful investors who can finance a start-up business. You can ask your friends or family if they know someone who is an angel investor. However, some angel investors do not only provide capital as some of them will tell you how to run your business.
From the name itself, this type of capital option comes from a venture capital firm. If you need a certain amount of money that cannot be provided by an angel investor, then a venture capitalist can be an alternative. Unlike angel investors who invest alone, venture capitalists represent a company, which gives them the advantage of providing more capital.
ACTION COMMUNITY FOR ENTREPRENEURSHIP
Launched in 2003, the Action Community for Entrepreneurship or ACE is an organization that fosters and promotes entrepreneurship in Singapore. The organization offers different programs depending on the stage of your business. From entrepreneurs who want to start their own business to those who want to venture overseas, this organization can help you through those stages.
Another option for you to avail capital funding is by applying for a business loan through a bank. There are banks in Singapore that offer a business loan for small to medium enterprises. You have to be sure that you can pay back the amount with interest. Also, having your business loan approved can be difficult, especially if your business is new.
FRIENDS AND FAMILY
Where better to ask money from than the people you know and trust? One advantage of borrowing money from your friends and family is that they can loan you money without interest. However, you have to take note that borrowing money from them is on a personal level. If you fail to pay them back, then it can strain your relationship with them.
There are government grants that are available for entrepreneurs who either want to start their own business or to expand their business. In Singapore, the government will offer different grants for entrepreneurs, but you still have to apply and to pass the criteria for you to be eligible. These are just some of those government grants that you can avail.
- Startup SG Founder – This kind of grant not only provides capital to entrepreneurs, but it also provides mentorship for them.
- Productivity Solutions Grant – This grant is for local companies that want to use technology to boost their productivity. This grant covers various sectors of businesses to help different entrepreneurs succeed with their business.
- Enterprise Development Grant – This government grant will support your business from upgrading to expanding overseas.
If you have a surplus amount of money, then you can use it to invest in your start-up business. However, keep in mind that you should not use up all of your savings because starting a new business is a gamble. If your business will not generate enough income, then it is important to have enough money to help cushion your personal and business expenses.
Some businesses are born and are successful because of the efforts of a partnership. Having partners will allow you to have more ideas and funding for your business. However, having partners, there is always a risk for disagreements. Also, you and your partners share liability and debt, which is why you must find partners who have the same drive and mindset as with yours.
A business incubator is a company or an institution that helps start-up businesses. In exchange for equity from your business, they can provide mentorship, a certain amount of capital, and even office space. However, it is difficult to apply for the programs of these companies.
HOME EQUITY LOAN
If your bank or moneylender did not grant your business loan, then getting a home equity loan can be an alternative. A home equity loan allows you to borrow money against the value of your home. This type of loan can let you borrow a huge amount of money with a low-interest rate. However, this means that your home serves as collateral, which will put you at risk if you are unable to pay back the loan. Thus, you should only borrow money that you need.
Crowdfunding is a method of raising small amounts of money, which is given by a large number of people. One advantage of crowdfunding is that it can be done online, as there are online crowdfunding sites. There are many types of crowdfunding such as reward crowdfunding and donation crowdfunding.
This option can serve as an alternative should you have a difficult time in finding a private investor, or getting a loan from a bank. However, raising enough capital from crowdfunding can be difficult.
Of course, another capital funding option is through the services of a moneylender. Moneylenders have the advantage of requiring less stringent requirements. They can also grant your business loan immediately. However, be careful in choosing a moneylender. Some moneylenders are unlicensed and can charge you with an unreasonably high interest rate.
Thus, if you want to borrow from a moneylender, then look no further. Choose A1 Credit! They are licensed, reputable, and can offer you the best deal.
KEEP IN MIND
Keep in mind that starting a business is a gamble. If you fail to pay back the money that you borrowed, then it can put you in a difficult situation. Before you consider borrowing money, choose a capital finance option that can offer you the best deal.